EGYPT

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MIS680 Dr. Paul Licker Jason Rhodes Scott Leslie Rodney Libby Christina Mu�oz Tammy Morton

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75% Desert 2.8% arable land Size of New Mexico Controls Suez Canal Strategic geographical location that makes it a hub that can connect Europe, Asia, Africa and the Mediterranean Geography

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76,117,421 Population

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Female - 73 years Male - 67.94 years Total population - 70.41 years Life expectancy at birth

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Arabic is the official language English is widely spoken in business circles Language

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petroleum, natural gas, iron ore, phosphates, manganese, limestone, gypsum, talc, asbestos, lead, zinc Agricultural Products - cotton, rice, corn, wheat, beans, fruits, vegetables; cattle, water buffalo, sheep, goats Natural Resources

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Rich ancient history, most notably the pharaohs The Arabs introduced Islam and the Arabic language in the 7th century and ruled for the next six centuries Following the completion of the Suez Canal in 1869, Egypt became an important world transportation hub connecting the Red Sea with the Mediterranean Sea. Britain seized control of Egypt government in 1882 Gained partial independence from Britian in 1922 but didn�t gain full independence until after World War II Egyptian-Israeli peace treaty signed in 1979 History

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Constitution written in 1971, amended in 1980 President is nominated by a 2/3 majority of their People�s Assembly People�s Assembly: 444 elected members 10 members assigned by the President Politics - Present

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Judiciary system has 4 levels from districts up to Supreme Constitutional Court Currently 17 active political parties- by law they can�t be religiously affiliated 26 Governorates (states) run by Presidential appointees Politics � Present, con�t.

Slide 11:IT-led Development

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57.7% literacy rate �68.3% males �46.0% females 8,000+ university graduates in IT disciplines 600+ post graduates 250 PHD�s Education

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In the 1990�s Egypt received massive external debt relief through arrangements with the IMF as a result of participation in the Gulf War coalition. In 2002, Economist magazine ranked Egypt third among 25 emerging markets for economic performance based on financial and political stability. Egypt�s steps over the last 10 years towards a more market-oriented economy has prompted increased foreign investment. Economic Overview

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Increases in GDP over the last 5 yrs. Due to increases oil & Suez Canal revenues $200 billion 1999 $294 billion 2003 Increases in GDP Per Capita over same time period $3,000 (1999) $3,900 (2003) US $37,800 (2003) Saudi Arabia $11,800 (2003) Real GDP growth rate over the same period has decreased by almost half from 5% in 1999 to 2.8% in 2003 Economic Overview

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2003 GINI Index - 34.4 US - 40.8 Brazil - 60.7 2000 estimates place 16.7% of population below the poverty line US - 12% South Africa - 50% 2003 inflation was 4.3% compared to 21.1% in 1992 however it has steadily increased from 3.7% over the last 5 years as a result of economic & financial system reforms. Economic Overview

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Unemployment in 2003 was 9.9% (1.8 Million people) down from 11.8% (1999) Over the last 5 yrs. Egypt has experienced a shift in the labor force from agriculture and industry to the services sector Labor Force

Slide 17:Egypt�s Labor Force by Occupation

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Egypt�s primary exports: crude oil and petroleum products, cotton, textiles, metal products, chemicals In 2003 Egypt had $8.759 billion in exports Major export partners include: US 13.6%, Italy 12.4%, UK 8.1%, France 4.8%, Germany 4.7%, India 4.2% US Exports 2003 - $714.5 billion Saudi Arabia Exports 2003 - $86.53 billion The development of an export market for natural gas is considered a plus for future growth Exports

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Egypt�s primary imports are machinery & equipment, foodstuffs, chemical, wood products & fuels. In 2003 Egypt had $14.75 billion in imports Major import partners include: US 13.4%, Germany 7.3%, Italy 6.9%, France 6.5%, China 4.7%, Saudi Arabia 4.2% US Imports 2003 - $1.26 trillion Saudi Arabia Imports 2003 - $30.38 billion Imports

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Total Public & Private external debt has remained relatively stable over the last 5 years at approximately $30 billion USD. Public Debt in 2003 was 101.8% of GDP US - 62.4% Saudi Arabia - 94.6% China - 30.1% Debt

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Egypt Received $1.2 billion in 2001 This includes assistance from the World Bank, the IMF, and other international organizations and from individual nation donors. Economic Aid

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Mid 1970�s � open door policy allowed foreign banks to operate in Egypt 1990�s banking sector was liberalized 49% limitation on foreign ownership of domestic banks was lifted Competition between banks left to market forces Banks were now allowed to determine their own lending and deposit rates and spreads Financial System

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Government no longer allowed to print money to cover its fiscal deficit The Central Bank of Egypt is the regulating body responsible for setting banking policies The government continues to influence the official exchange rate offered in banks due to a black market for hard currency. Financial System cont.

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Presidential Decree 101/98 established the Telecommunications Regulatory Authority to supervise the setting of rates, monitor quality and license new telecom services. The Ministry of Communications was established in October 1999 to support telecom infrastructure development IT Planning

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Communication and Information Technology Plan proposed in 1999 Objectives: create a vibrant and exportable CIT industry support the development of a state-of-the-art national telecom network; increase employment opportunities; build an information society; develop and upgrade CIT systems to improve standards of living and support competitiveness.

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The number of internet service providers has jumped from 40 in 1999 to 267 in August of 2004 Egypt has 775 government subsidized internet cafes mostly located in Cairo and Alexandria IT Industry

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The Information Technology Institute (ITI) Established by The Information and Decision Support Center (IDSC) in 1993 Specialized Development Programs UNIX Administration/Development Java & Web Development LAN Administration http://www.iti.gov.eg/ IT Training

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Due to free internet service launched in 2002, the number of internet users has increased from 1.7 million users in 2002 to 3.6 million in 2004 Mobile phone subscriptions have risen from 4.5 million in 2002 to 6.68 million in 2004 IT Penetration

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Mobile Phone Subscribers

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13% of Egypt a land line, 9% cell phone, 5% internet use United States has 63% land line, 54% cell phone, and 54% internet usage Teledensity

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IT Investment

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Infrastructure Public Data Internet Services Wireless and Mobile Networks Areas of IT Investment

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The government is seeking a strong partnership between the public and private sector in building an information society. Providing incentives that foster an attractive climate for investors is a primary focus. Egypt feels it has created a deregulated environment that promotes free competition. Public-Private Partnership

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Streamline the process for international companies to invest in Egypt Provide foundation for licensing companies that supply networks and services Tax exemptions of 5 to 10 years are offered Telcom Hotel and Pyramid Smart Village for international call centers and regional internet traffic hubs are established. Investment-friendly laws

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As part of a 3 year $1 billion project, Telcom Egypt (TE) is seeking a strategic partner to modernize Egypt�s infrastructure. TE would like to find a private partner to help deploy a fixed Wireless Local Loop nationwide. Telcom Egypt

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300 acres of land 20 minutes from downtown Cairo (10 Km from Pyramids) Land was donated by the government, all other investment has been privately funded by 51 shareholders. The 51 shareholders are mostly companies including Microsoft, Cannon, Hewlett Packard plus many Egyptian IT companies. Pyramid Smart Village

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Have a right to own their land and real estate Have the right to transfer funds out of the country Are held to no price controls or profit ceilings Have protection from nationalization Residents of the Smart Village:

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Designed to combat the digital divide through: Subscription Free Internet- Offers internet access without a monthly fee and at the cost of a local phone call PC for Every Home- Affordable computers payed on installments with no collateral required. 72,000 computers purchased in the first two years of this plan. Information Society Initiative

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Broadband Initiative Information Technology Clubs- Government sponsored internet cafes in dense and remote areas of Egypt aimed at familiarizing people with computers Information Society Initiative

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According to The Economist, In 2004 Egypt ranks 51st out of 64 in terms of E-readiness. The US ranked 6th & Saudi Arabia ranked 48th www.ebusinessforum.com E-Commerce

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E-commerce has been held back by low computer literacy rates and penetration. According to estimates from Pyramid Research, there were about 14 computers per 1,000 persons in 2001. In addition, credit-card use is low--there are about 450,000 credit cards in Egypt, held by some 200,000 persons. Most are still unwilling to trust using their credit cards on the web. E-Commerce

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There are now around 5,000 Egyptian websites, but only 200-250 of them are e-commerce sites B2B has generally proven more successful because computer penetration is much higher within the business community than the general population. E-Commerce

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Strengths: Strong government support and plan Weaknesses: Infrastructure is not developed and industry is in its infancy Opportunities: Stable country allowing easy entry into the middle eastern market Threats: Terrorism, exporting talent IT Industry Strengths & Weaknesses

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Selected for comparison based upon geographic proximity, similarity in size, religion and ethnic background Saudi Arabia is an oil-based economy with strong governmental controls over major economic activities. Saudi Arabia has the largest reserves of petroleum in the world. Country comparison � Saudi Arabia

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http://www.smart-villages.com http://www.mcit.gov.eg http://www.sis.gov.eg/ http://www.presidency.gov.eg/ http://www.ibm-e.com/ http://www.nbe.com.eg/English/index.htm Sample Egyptian websites